Over the past few years, forex trading has gained in popularity. There is so much hype surrounding forex trading as more and more people are investing in it.
However, there are still many people who are struggling with the question of how they can get started in this so called ‘lucrative’ business. There are different types of forex trading accounts namely; standard, mini and managed accounts.
Primarily, the first thing you should do before opening up a Forex trading account is to find a Forex broker. In order to make the right decision, it is advisable to play around with different demo accounts offered by different brokers. This way, you are better placed to know what type of account best suits you.
After identifying the forex broker that you want to work with, the next step should be asking the broker to help you set up an account. A Forex trading account is what you will be using to hold and trade foreign currency.
So, how do you go about opening a trade account?
When setting up a Forex trading account, your forex broker will ask you to provide him with some personal information, which may include;
- Your name
- Email address
- Physical address
- Phone number
- Password for your forex trading account
- The type of currency you wish to trade
- Date of your birth
- Country of origin
- Social security number and
- Your employment status
Also, your forex broker can ask you for additional information such as;
- Your trading objectives
- Net worth
- Annual income and
- Your trading experience.
I know you might be wondering why you have to provide all these information right?
Here’s why:
Industry Compliance
Considering that in the past few years, forex trading had earned itself a very bad reputation due to high levels of scam and fraud, regulations have been put in place as a way of returning sanity in the field.
As a matter of fact, you should be very weary and concerned if a Forex broker offers to help you open an account without asking you to provide any of the information mentioned above.
After providing the forex broker with all the necessary information, the broker is required to enlighten you on all the risks that are associated with forex trading.
Never ignore the warnings or any advice that your broker gives you. Always remember that forex trading is a difficult and dangerous business especially for beginners. If you are not careful, you might end up losing more than you signed for.
After receiving all the required information, your forex broker may ask you to provide some verification documents such as a national identification card. Do not fret. This is just a step in verifying that the information provided is correct.
This process may take up to two days but once verified, you can fund your account and start trading right away. For one of the better Forex Trading platforms, make sure you check out MetaTrader 4.
However, it is advisable to always start with a fair amount of money. Trade small as you learn the rules of the game. Never put an amount of money in your account that you are not ready to lose.
Some Things to Consider When You Are a Beginner Trader
Forex Trading is Not Exciting
Contrary to what many people think, forex trading is supposed to be actually boring. Do not let your emotions guide you while trading.
Invent more time doing research. Use systematic logic when trading. Do not let winning trades wound you too much. Also, do not let the feeling of losing trades lead you to becoming destructive or frustrated.
Keep Your Sanity
In case you start feeling as if you are making some common forex mistakes, maybe it is time to stop trading and review your basics again.
Always re-evaluate the methods you are using in your forex trading just to make sure that you are still achieving your goals.
